It seems like an ideal arrangement: Teachers working as independent contractors gain flexibility over their schedules and improve their cash flow. Studio owners add expertise and variety to class schedules as interest and enrollment warrant, by hiring ICs. The owners also reduce their costs significantly, since they don’t pay Social Security, Medicare, federal or state payroll taxes, unemployment insurance, worker’s compensation, health insurance, or for vacation and sick leave, as they would with employees.

This is a good thing all around, right? Not exactly, according to the IRS, state revenue authorities, workers’ comp boards and the Department of Labor. Like most things that sound too good to be true, the use of ICs isn’t always what it seems. In fact, quite often incorrect use of ICs is a direct violation of federal and state tax and federal labor laws.

How can an arrangement between two consenting parties be wrong? The difference between tax abuse and a winning arrangement is a matter of definition. If found on the wrong side, parties run the risk of being assessed back taxes and the studio owner may pay additional fines.

For studio owners, the tax savings can blind them to the disadvantages of using ICs. Because they are independent, these workers are free to come and go. By definition, they are not under the business owner’s control, and by law, they shouldn’t be. How they teach isn’t up to you. They can’t be fired. And because you aren’t paying workers’ comp, you bear the sole liability for any work-related injury. This is because workers’ comp is offered to employees in exchange for their right to sue their employer. But to an IC, you are the sole source for restitution. Also, an audit flag goes up for government agencies that target this area for review.

The key advantage to being an IC for teachers is flexibility. But this is possible through part-time employment as well. When you are an IC, job security and protection against unfair practices or discrimination disappear. Health insurance, unemployment benefits, workers’ comp and the opportunity for paid leave (for illness, vacation or even jury duty) are forfeited. If injured on the job, your only recourse for lost income is to sue the studio owner/client for negligence. You bear full responsibility for state and federal taxes—not to mention Social Security and Medicare, which are subsidized by employers, and therefore higher for the self-employed (this is known as the self-employment tax). While you can deduct business-related expenses, keep in mind that these are primarily expenses that your employer would cover. The only real tax break that the self-employed receive is being able to put away substantially more tax-deferred money for retirement than employees can.

Defining Your Identity
Just because a studio owner identifies a teacher as an IC doesn’t mean this definition is correct, even if it’s in writing. The key determinant is how “independent” the contractor really is. ICs who only work for one studio, for instance, might actually be employees—full- or part-time, depending on how the studio defines a full-time schedule (typically, anything over 32 hours a week, in a 52-week year, is considered full-time).

The IRS takes a rigorous approach to maintaining its distinctions. Though it doesn’t use a precise formula to determine when exactly one crosses the line between being an IC and an employee, it questions how a relationship is structured. (For a clearer understanding of IRS expectations, see the Q&A; below.)

But even the IRS doesn’t expect perfect compliance with its guidelines. They are most focused on the issue of control, which is the hardest for many studios and teachers to overcome, as Angela Floyd, owner of Angela Floyd School for the Dancer in Knoxville, Tennessee, has discovered. “In a ballet school, the owner makes the schedule. My understanding, at least in Tennessee, is that once I set the schedule for teachers to adhere to, they are my employees,” says Floyd. To avoid the risk of being caught on the wrong side of the definition, Floyd hires her teachers as part-time employees.

However, if teachers are visiting—teaching workshops or involved in a short-term project, and their primary draw is their expertise—then IC status is defensible. In such visiting-artist situations, the content of the class would be determined independently of the studio and that guest artist’s reputation would be the main attraction of the class. However, independence would be hard to defend with a substitute teacher who follows the curriculum guidelines determined by the studio.

Which One Are You?
Before pursuing the IC route, consult your tax advisors for guidance on your state’s requirements and about how best to structure these relationships. Understand that since agencies may not share these definitions, owners may need to treat the same worker as an IC for one government agency, and as an employee for another in order to be in compliance. If the studio, for instance, withholds federal taxes as though the teacher were an employee, but not state taxes, the teacher should be sure to pay the estimated taxes due the state. For the teacher, the main responsibility is making sure taxes are being paid on time.

Studio owners should consider requiring ICs to fill out an Independent Contractor Form, detailing their place of business, other client relationships, credentials and insurance coverage. For the owner, this helps document a legitimate IC arrangement. Owners should never let ICs fill out the same job application that prospective employees fill out. That would create evidence that the owner actually considered the IC an employee.

Create a written contract that describes what services will be provided, the hours of availability, the cost and what compensation will be due to the owner should the IC fail to perform satisfactorily. Include beginning and ending dates to avoid the appearance of employment and list what, if any, expenses will be reimbursed. The greater the responsibility an IC has for business (and travel) expenses, the more independent he or she appears and the greater the evidence he or she has personal money at risk. The following websites offer useful guidance for the structure and content of such a form:


Sticking to Status Quo
To maintain IC status, teachers should abide by the following rules:

  • Do not ask for supervision or instructions on how to run your class.
  • Hire and pay any assistants yourself.
  • Invoice for your services using your own stationery, and keep records of payment.
  • Have business cards and a business phone line as proof that your services are available to multiple studios. Offer this information to each studio for their records.
  • Keep your business expenses separate from your personal expenses.
  • Avoid being deemed a part-time employee by one studio and offering yourself as an IC performing the same duties elsewhere. It could lead the IRS to reclassify you.
  • Pay taxes quarterly. Also, if you equate IC status with pocketing tax-free pay, rethink your strategy. If your client is tax compliant, and paying you more than $600 annually, they will be filing that information with the IRS, where it can be crosschecked.

Confusing an IC status with that of an employee can lead to government penalties. Make sure that you take
the time to sit down with teachers and owners (and ideally with their respective tax advisors) and clearly define the distinction and weigh the risks. A careful assessment now will save you time and energy later. DT

Q & A

The IRS uses these distinctions to evaluate the status of an IC:

Q: Does the worker receive instruction in how, when or where to do work, what materials should be used, which assistants to hire to help with the work or where to purchase supplies or supporting services?
A: ICs should set their own hours, have their own places of business and determine independently how they will get the job done. Note that in practice, the IRS seems to focus more on “how” than “when,” “where” or “with what.”

Q:Does the worker receive training or need to do the work in a certain way?
A: ICs use their own methods to accomplish the agreed-upon results.

Q: Does the worker’s involvement in the business impact its success or
A: The services a specific IC provides should be separate (i.e., the business can use them or not and still thrive).

Q: Does the worker have a continuous or exclusive relationship with
the business?
A: An IC is hired to do a project. There is no assumption of a continuous
relationship, nor should the relationship be exclusive—the IC is free to take on assignments from other clients.

Q: Do the workers have an investment in the work being done?
A: ICs need to have something at risk, like a reputation, that ties the work to them and not to the studio. The IC would also retain the copyright to his or her work (e.g., choreography) unless otherwise sold.

Q: Do workers bear the responsibility for all or most of their business expenses, or are they reimbursed?
A: ICs should not expect reimbursement.

Q: Has the worker executed a written contract that specifies the nature of the results expected by the client and the cost?
A: ICs operate under contract, a written document specifying the results
the client expects, timeframe and cost. Generally, payment by the hour is appropriate for employees; ICs are expected to price by the project.

Q: Can the worker realize a loss from the contract?
A: ICs bear the risk of doing business. This means they could theoretically
lose money dealing with a particular client due to poor decision making or nonpayment, for instance.

Q: Does the worker receive any benefits, such as insurance, pension or
paid leave?
A: ICs do not receive any benefits. Keep in mind, though, that simply
withholding benefits from workers who would otherwise be classified as employees doesn’t change their employment status.

Q: Can the worker be fired or have the right to quit?
A: ICs can’t be fired without financial consequence as long as they are
providing the results specified in their contracts, nor can they quit without
financial consequence, the way an employee can. The contract specifies the
liability attached to a job that isn’t well done.

Chicago-based freelance writer Gayle B. Ronan has written financial, investment, business management and tax-related articles for Bloomberg WealthManager, TICKER Magazine and

The Conversation
Dance Teachers Trending
Photo courtesy of Hightower

The beloved "So You Think You Can Dance" alum and former Emmy-nominated "Dancing with the Stars" pro Chelsie Hightower discovered her passion for ballroom at a young age. She showed a natural ability for the Latin style, but she mastered the necessary versatility by studying jazz, ballet and other forms of dance. "Every style of dance builds on each other," she says, "and the more music you're exposed to, the more your rhythm and coordination is built."

Keep reading... Show less
Studio Success with Just for Kix
Bill Johnson, Courtesy Just for Kix

Running a dance studio is a feat in itself. But adding a competition team into the mix brings a whole new set of challenges. Not only are you focusing on giving your dancers the best training possible, but you're navigating the fast-paced competition and convention circuit. Winning is one goal, but you also want to create an environment that's fun, educational and inspiring for young artists. We asked Cindy Clough, executive director of Just For Kix and a studio owner with over 40 years of experience, for her advice on building a healthy dance team culture:

Keep reading... Show less
Just for fun
Via Instagram

Happy Father's Day to all of the dance dads in the world! Whether you're professional dancers, dance teachers, dance directors or simply just dance supporters, you are a key ingredient to what makes the dance world such a happy, thriving place, and we love you!

To celebrate, here are our four favorite Instagram dance dads. Prepare to say "Awwwwwwwweeeeeee!!!!!!"

You're welcome!

Keep reading... Show less
Sponsored by Insure Fitness
AdobeStock, Courtesy Insure Fitness Group

As a teacher at a studio, you've more than likely developed long-lasting relationships with some of your students and parents. The idea that you could be sued by one of them might seem impossible to imagine, but Insure Fitness Group's Gianna Michalsen warns against relaxing into that mindset. "People say, 'Why do I need insurance? I've been working with these people for 10 years—we're friends,'" she says. "But no one ever takes into account how bad an injury can be. Despite how good your relationship is, people will sue you because of the toll an injury takes on their life."

You'll benefit most from an insurance policy that caters to the specifics of teaching dance at one or several studios. Here's what to look for:

Keep reading... Show less
Studio Owners
Getty Images

If you're a studio owner, the thought of raising your rates most likely makes you cringe. Despite ever-increasing overhead expenses you can't avoid—rent, salaries, insurance—you're probably wary of alienating your customers, losing students or inviting confrontation if you increase the price of your tuition or registration and recital fees. DT spoke with three veteran studio owners who suggest it's time to get past that. Here's how to give your business the revenue boost it needs and the value justification it (and you) deserve.

Keep reading... Show less
Sponsored by World Class Vacations
David Galindo Photography

New York City is a dream destination for many dancers. However aspiring Broadway stars don't have to wait until they're pros to experience all the city has to offer. With Dance the World Broadway, students can get a taste of the Big Apple—plus hone their dance skills and make lasting memories.

Here's why Dance the World Broadway is the best way for students to experience NYC:

Keep reading... Show less
Dance Teachers Trending
Margie Gillis (left); photo by Kyle Froman

Margie Gillis dances the human experience. Undulating naked in a field of billowing grass in Lessons from Nature 4, or whirling in a sweep of lilac fabric in her signature work Slipstream, her movement is free of flashy technique and tricks, but driven and defined by emotion. "There's a central philosophy in my work about what the experience of being human is," says Gillis, whose movement style is an alchemy of Isadora Duncan's uninhibited self-expression and Paul Taylor's musicality, blended with elements of dance theater into something utterly unique and immediately accessible. "I want an authenticity," she says. "I want to touch my audiences profoundly and deeply."

Keep reading... Show less
Dance Teacher Tips
Getty Images

Teaching arabesque can be a challenge for educators and students alike. Differences in body types, flexibility and strength can leave dancers feeling dejected about the possibility of improving this essential position.

To help each of us in our quest for establishing beautiful arabesques in our students without bringing them to tears, we caught up with University of Utah ballet teacher Jennie Creer-King. After her professional career dancing with Ballet West and Oregon Ballet Theater and her years of teaching at the studio and college levels, she's become a bit of an arabesque expert.

Here she shares five important tips for increasing the height of your students' arabesques.

Keep reading... Show less
Dance Teacher Tips
Photo by Jennifer Kleinman, courtesy of Danell Hathaway

It's high school dance concert season, which means a lot of you K–12 teachers are likely feeling a bit overwhelmed. The long nights of editing music, rounding up costumes and printing programs are upon you, and we salute you. You do great work, and if you just hang on a little while longer, you'll be able to bathe in the applause that comes after the final Saturday night curtain.

To give you a bit of inspiration for your upcoming performances, we talked with Olympus High School dance teacher Danell Hathaway, who just wrapped her school's latest dance company concert. The Salt Lake City–based K–12 teacher shares her six pieces of advice for knocking your show out of the park.

Keep reading... Show less
Getty Images

Q: I'm looking to create some summer rituals and traditions at my studio. What are some of the things you do?

A: Creating fun and engaging moments for your students, staff and families can have a positive impact on your studio culture. Whether it's a big event or a small gesture, we've found that traditions build connection, boost morale and create strong bonds. I reached out to a variety of studio owners to gather some ideas for you to try this summer. Here's what they had to say.

Keep reading... Show less
Dance Teacher Tips
Sam Williams and Jaxon Willard after competition at RADIX. Photo courtesy of Williams

Self-choreographed solos are becoming increasingly popular on the competition circuit these days, leading dance teachers to incorporate more creative mentoring into their rehearsal and class schedules. In this new world of developing both technical training and choreographic prowess, finding the right balance of assisting without totally hijacking a student's choreographic process can be difficult.

To help, we caught up with a teacher who's already braved these waters by assisting "World of Dance" phenom Jaxon Willard with his viral audition solos. Center Stage Performing Arts Studio company director Sam Williams from Orem, Utah, shares her sage wisdom below.

Check it out!

Keep reading... Show less
Studio Owners
Getty Images

Dance studios are run by creative people with busy schedules, who have a love-hate relationship with props and sequins. The results of all this glitter and glam? General mass chaos in every drawer, costume closet and prop corner of the studio. Let's be honest, not many dance teachers are particularly known for their tidiness. The ability to get 21 dancers to spot in total synchronization? Absolutely! The stamina to run 10 solos, 5 group numbers, 2 ballet classes and 1 jazz class in one day? Of course! The emotional maturity to navigate a minefield of angry parents and hormonal teenagers? You know it!

Keeping the studio tidy? Well...that's another story.

Keep reading... Show less


Get DanceTeacher in your inbox